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tv   [untitled]    November 19, 2011 4:30am-5:00am EST

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video on demand cheesemonger broadcasts an r.s.s. feed now in the palm of your. column. at that time for the main headlines. pepper spray and vote on the will to use it police may said the school student protests at a california university as national crackdown on the popular intensifies. basically gives final approval to its new prime minister with bringing order to the country's finances but in spain the vote is prepared to pick the leader they hope will be their financial savior. thousands of egyptians are back in tahrir square calling for the military commissions of the controversial paper proposes to make
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its power planet. money's about thirty minutes time right now there it's the kaiser reported max and stacey they discussed the tiny rule changes and the so-called zombies and the collapse of human strength and i thank you. max foster this is a cause report hey you there in london i'll be at the king's head of boro at eight pm for my max range live show yeah i'm still on tour taking it to the bankers station herbert what's happening with the bankers and all their fraud well max is this here presidential tour because i see from this little video here somebody in pennsylvania is driving around with a nice what is that in eldorado. and it says kaiser celebrity two thousand and twelve yeah well so what they were going to fund our campaign until he lost it all
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i'm f. global all that charles yeah no i think that's a fleetwood cadillac's fleetwood. well speaking of m.f. global i have quite a few stories on that first going to turn into a video here and this is bill fleckenstein and he's being interviewed on c n b c and he's asked by the presenter whether or not he thinks he'll see his money back i do think there's some possibility that the money will show up because it occurs to me if in fact funds are misappropriated that would have had to be several people involved with that and i'm surprised if that were the case someone has been charged with a crime yet and that has no occurred it might just be the sheer volume of people heading for the exits combined with bad system could have resulted in a missing six hundred million that i got a lot of votes like and feinstein is
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a or he's desperately trying to talk his way into getting his money back or both this is kind of interesting that professionals' you've written books you know bill's written a book about corruption in the banking sector and you want to happens to them whether it's bill fleckenstein or gerald soul. today of course is a little more savvy and terms of the fact that he got on mercifully penned stated by the banks bill fleckenstein same to still in denial he's like a life beating victim oh oh i got my money stolen please do it again well you must have heard this many times when you. lost money for clients as a banker they blame themselves that was fantastic about having customers when i was working on wall street you lose the money and they blame themselves plastic you just keep still no money and there keep crying about. help me relieve me of my money in the guilt so here's bill fleckenstein praying hoping believing that all
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the good faith of the world that the money will be found well let's turn to another clip or close and one of the executives at the c f t c which is regulating this market well he's asked the same thing where is the money good question i've been doing the jerry maguire show us the money for a couple weeks here we've had people there and it's not where it should be but it looks suspicious as heck to me it's here to farias or illegal in one personal opinion but that's why we have an investigation the money should be there in drew it's not should be sacrosanct and it's really troubling oh no bart chilton his name keeps coming up for him under a few months back he was involved in a cancer exchange h s x box office features scandal we got inside information about how he was working with n.p.a. and all the skullduggery get done behind the scenes on that one now he's claiming anger and psycho we don't know where the money went of course they went into the
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account as someone today has says eloquently their support for the movie they're just steal money now and pretty soon they'll still money accompanied by a knock on the head and thrown into prison and that's what happens when you look clump the cracks around the system whether it's in greece ireland america the u k. this is their methodology well he refers to rule one point two five and this is regulation right it. what rule yeah there are a lot of rules of they are there to see you have to say oh yeah so from two thousand and five bankers brokers trading on this exchange share were able to use internal repos to basically buy any debt in the world here he explains that a little bit and one of the things that we did was we allowed these internal reposed back in two thousand and five just to explain to people this is something where you can internally commingle some of the accounts for the part of the day
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that we're going to post the commingle exactly what you do is you take the segregated customer money which is supposed to be sacrosanct job number one for us they take that money and they use it for something that is supposed to be a safe investment like maybe a aaa sovereign debt or u.s. treasury but it's a temporary thing you agree to buy it back that's the internal report let me explain something about the so-called rules and rule one point two point five all of the banks on the last three doing what they're doing today the money center banks the too big to fail banks if they were being governed by the laws that were in place fifteen years ago they would all be in jail today. however because of all the money they've made stealing buying congressmen buying senators going to supreme court buying the judicial system buying the political process those laws don't exist anymore or they change the law it is rule one point two point five what year two thousand and four regulation one point two five which was relaxed in two
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thousand and nine further relaxed in two thousand and four two thousand and five yeah well this is what is the example of there's a rule in place a law to keep people from stealing like you see a geek in front of winston's jewelry down here plaza today in paris that gate that armor guard the the bullet proof glass is there for a reason because otherwise people would just take all the jewels so there's rules so here you have in two thousand and two thousand and four two thousand and five every single year the gangsters the criminals the people who won seventy ninety three in paris got their heads cut off because they exist if i click like you just go buddy those people decided to rewrite the laws because they want to steal the money with impunity and the regulator said give the bride well max you mention winston jewelers and i do believe it was actually robbed a few years ago by
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a man dressed as a woman don't look him in a polar bear live now that i would never be caught in public with high heels of that color i'm a chanel man so let's turn to this woman in this next story laurie ferber she's keefe counselor at m.f. global and prior to that he was chief counsel at goldman sachs for twenty years ok that you will be with us she's at the heart of this the relaxation of regulation one point two five ok so tiny rules change at the heart of m.f. global failure from december two thousand the c f t c that's when they first agreed to. amend regulation one point two five to permit basically riskier investments that could make more money for wall street or they didn't have to share any of those profits with their clients but they were taking their clients the customer funds the segregated funds and betting it overnight but they had to replace it in the morning so then in february two thousand and four in two thousand and five
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regulation one point two five was further amended to read fine to the liking of ferber and the banks in the end the door was open for firms such as m.f. global to do internal repos of customers deposits and invest the funds in the general obligation of sovereign nations ok well here's the here's the thinking that went on here you see because sovereign debt aaa rated or double a right of sovereign debt is considered to be a credit worthy but of course the c f t c s e c f s a c f o as a p.p.p. lalala all these regulatory agencies that add up to big bold doubtless but soup of nothing they didn't bother to take a look at the fact that concurrently was the sovereign that being is collateral to perpetrate fraud there is collateralized i'm sorry i credit default swaps and other derivatives that are created to do an end run around the. margin requirement the minimum capital requirement the sovereign debt requirement as stipulated by basil
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as a one level two vessel three so they went around that because they've got ten twenty thirty times more credit default swaps and there is sovereign debt how come greece's debt keeps getting downgraded how can arlen keeps putting itself in the pooper how come the entire euro zone is collapsing because every time they announce a bailout of a one trillion or five trillion wall street they could get banks just issue fifty trillion more credit default swap doesn't matter if you put up one hundred cents of a dollar in a triple a rated sovereign credit if i've got forty trillion c.d.'s to sell make it into the market and drive your sovereign debt down i'm going to listen and i'm going to penn state on your the fact is here that they were leverage fifty to one so all they needed was a decline of two percent overnight and this was on european debt which was moving at three four five six seven eight nine ten percent overnight so of course there was a run on their face right with it but rather that moving that debt is not a market it's behavior it's manufactured through market manipulation let's be clear
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about that that's not a normal market is a normal price discovery happening in this market the prices are determined ahead of time and goldman sachs manipulates the markets or j.p. morgan it really started to change the price they pre-determined that's where we're at now free market capitalism is dead well i'm surprised you didn't pick up on how i set you up therefore it is lori farber and relation to cooler faffed and at winston's because i thought soon today she could be goldman sachs's own lloyd blankfein dressed as the general counsel going into these meetings at the c.s.t. c r u h u e suggesting that lloyd blankfein is a cross dresser who dress up like this regulator for the see if you see it goes in the meetings a lobbyist for behalf of his firm playing the woman card he's trying to seduce how many how much what is oh my god now that i just that is very strange thought of her early on in here tonight i know but i mean how far did you go. oh. oh lord and lloyd go to get these rules change the lord you're
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a good boy finally on who pig fast two thousand and eleven bank of america merrill lynch is offering to buy claims against m.f. global so bank of america's merrill lynch unit is soliciting for the purchase of claims against m.f. global as you may recall max bank of america is one of the major creditors of m.f. global with j.p. morgan and is reported to be one of the debtors along with j.p. morgan involved in the litigation trying to obtain superiority of their claims over customers whose money was taken last stolen by parties unknown for now that replaced their balance sheet is owned by the federal reserve so when they say oh thank you america wells what others. call bank of america merrill lynch yes they're . just joined into that. with the federal reserve bank was just going to spread their balance sheet by however many trillions of requires to make whole these these unholy security but it's also max that the case is here that because of their power
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in this mafia this syndicate this racket they're able to put these segregated account holders in a distressed position by being more powerful to be able to step in front of them in this chain of creditors standing in line at the trustees you know well that's true there is another leg to the massive going to be elation scam of putting these people into a stress position similar to what they do in guantanamo bay and finally on this story just these cafe americans has i have nothing against vulture funds per se although what i hear a few of them have done with two of the failed icelandic banks and their former directors proves rule four of zombie banking land always use the double tap. the double refers of course to two shots to the head two shots through the head which. brings me to more edgy albo art center max kaiser
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a vampire banker i'm sure there i am i think. all right thanks amber thanks so much for being on the kaiser report thank you max go and much more coming why stay right there. twenty years ago largest country. but how did. you get a job. where. i am max kaiser welcome back to the kinds of reports i'm not to go to new york city
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speak with barry ritholtz of revolt dot com varies a market analyst blogger journalist and author of bailout nation welcome back to the kaiser report barry thanks for having me all right barry first let's talk about your piece in the washington post what caused the financial crisis the big lie goes viral tell us about it well there's been this tendency amongst people who helped create the crisis rather than admit that radical deregulation and allowing bankers to set their own rules and granting special exemptions for the five largest banks to ignore the leverage limitations or allowing derivatives to be completely unregulated with no reserve requirements and no counterparty disclosures rather than say hey this one. really a big mistake hoops instead they've created this false narrative
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this argument that you know what really caused the crisis it was the government forcing banks to lend all that money to minorities and inner city poor people that's what caused the crisis the fascinating thing is the data every well mainly says that's not the case we know they took red leverage as soon as they were given permission from twelve to one so nearly fifty to one we know that they engaged in all sorts of speculative activity where they didn't understand the risks their models were just wildly optimistic they were so busy counting profits and bonuses that they didn't pay attention to the bottom line look it all comes down to some very very simple rules banking is supposed to be boring the job of a banker is to make decisions about who is credit worthy and who is not to give you an idea of how were reckless the banking industry became not only did they create
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these no doc loans they stopped validating loan to value of the home they stopped valuating credit scores and most importantly they stopped asking borrowers how much money they earned and that is the single most important factor in determining if someone's going to repay a mortgage or a loan how much do they actually own earn can they service that so when i hear this nonsensical things banks were forced to make loans to poor people nobody told the banks don't check income don't check credit rating don't check all the usual metrics that have worked for thousands of years it's just nonsense and when i see people propagating the big lie like that it makes me stop and say what are these guys hiding and it's pretty clear what they've been hiding they have an intellectually bankrupt ideology and it's causing global damage to the economy are you mentioned the leverage ratio. as being increase from twelve to one and the banks are leveraged fifty to one even the federal reserve bank itself as leverage
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fifty to one it goes back to two thousand and four i believe when greenspan lifted that cap which you refer to that as ignoring leverage limitations but isn't that hard coded law in terms of what the leverage limitations are corning under laws in place is that going back to the balance all yes ok so they are there for now it depends on who nasa depends on which financial institution talking about if you're talking about depository banks they have reserve rules which are implemented by the f.b.i. cia and others if you're talking to an investment banks there's the one nine hundred seventy five rule that limited them to twelve to one the five biggest investment houses in the u.s. got a waiver of that ironically it was called the bear stearns waiver bear stearns lehman merrill morgan and goldman the only one somehow exempted from that law stop and think about what that means here is a lot applies to everybody except you five guys who happen to be the single biggest
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donors to congress and that by the way that waiver was granted by the security and exchange commission the basil rules for depository reserves how much they have to hold what's fascinating about those is that they've been whittled away over time so the amount in reserve has come down fairly substantially which allows their leverage to go up so anything that gets in the way of profit regardless of risk there is a lobbying effort to try and reduce that it was very successful with the s.e.c. it's been somewhat successful with the federal reserve and the f.b.i. see and that's why there's so little capital in all these banks both in the u.s. and europe in fact the underlying cause of the entire global headache that we're still dealing with is too little capital too much leverage all right. though the law is that they have to have certain on account. versus the leverage on the books and what happens i'm only saying is that when if anyone starts to sniff around then
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they do something about lehman brothers did with the famous recall one zero five scam where they simply move debt off the balance sheet temporarily to satisfy a regulator that might be looking at them and then when the regulators leave the room they put that back on their balance sheet isn't that also the case these off balance sheet entities are hiding huge debt first of all what lehman brothers did with one o five that's just fraud as it is let's not mince words but the pussy foot around with this there are a bunch of criminals some of those some of them go to jail and unfortunately most of our prosecutorial staff are too busy chasing other nonsense but there's just no doubt in my mind that dick folds and his c.f.o. should be wearing stripes suits with numbers that is criminal you cannot hide one hundred billion dollars or fifty billion dollars at a time in spending and then put it back at the end of the quarter i don't know what the f.c.c. is i don't know where the u.s. attorney general is this it's laughable that's number one number two if you look at
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them the movement that's starting to pick up a little speed in the united states people have been moving their money away from the big banks to the small local community banks and what we found is that these small community banks they're much more solid they weren't involved with the rivet it was they were involved with subprime lending they embrace what we call boring banking they borrow money at four percent they lend it at six percent and they're out on the golf course at four pm and that sort of local community backing that sort of credit union banking is potentially the biggest threat to the major banks there's six or seven thousand of these banks in the united states some of them are five and ten branches large some of them are one or two they're all insured by the f.b.i. sea so you're my. it's safe there it hasn't been enough to affect their quarterly earnings yet but if that were to happen i think you would really start getting
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people's attention i very we've been watching these banks commit massive fraud not not the community banks the credit unions is you were just mentioning about the the too big to fail banks the big wall street banks they're in violation of the minimum capital rules without a doubt they're violating the law every day we've been watching this grow over the past few years but recently just this past week i think we're setting a new standard for criminality with this with the m.f. global scandal it seems that they're just reaching right into people's accounts and taking their money directly what's barry talk to me is this the new chapter in in the fraud mass where do you think it's your money you think you're entitled to your money that's all our money and if we decide we're going to need it to leverage up even more the hell with you we're taking it m.f. global there's just a whole different order of magnitude of this basically you know when you fill out an account form there are all sorts of things about what the bank or the investment house can do with your stock let's say we can hypothecate it we could surely
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against it we can lend it there's a bunch of things that could be done and it's supposed to be governed in regulated pretty clearly this is a pretty bright line as to what you can do and what is just out now to theft at least what it appears so far at m.f. global and maybe they'll find the missing missing six hundred million dollars maybe you know it's in a draw or someone made a line entry somewhere that's wrong but from the the appearances we've seen this looks like someone just backed up the truck wiped out the clients' money and said the hell with them we're stealing it it's just beyond outrageous and i think if anybody is going to jail in this whole past five year period it has to be someone from m.f. global if they can find this money there's no other description for it it's just grand theft. right now i j.p. morgan and bank of america creditors to m.f. global are saying our claims come ahead of the customers is that is that proper you
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know when you're involved in this sort of bankruptcy litigation everybody says that sort of stuff i think that there's some insurance on the accounts and there's some guarantees but if it turns out that the creditors have a superior claim to people who are opening accounts why the hell would i ever open an account with anyone again mattress sales are going to take up because that's going to become the new banks it's unthinkable that somehow an outside credal or is going to have a superior claim to. somebody who actually had their money with the brokerage firm in this case it's a combination of s.b.c. and commodities futures regulators who are supposed to be watching this look at the key takeaway from all of this is regulators can only do so much if someone is intent on stealing they're going to steal what you have to do as a regulator or a government is make sure that when these people get caught they're thrown in jail
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as a discouragement to other people might take away from the crisis of zero seven zero eight zero nine is still whatever the hell you want and run for the hills nobody cares no one is going to prosecute you maybe m.f. global get get us to the point where someone goes to jail and it acts as a as a disco argument to future people but right now the lesson that they're going to be teaching in business schools is don't do what lehman did don't just screw up a little bit to a bear stearns did screw up really big and don't worry if you're a bond holder you'll be made whole yeah i don't think a lot of people realize that when you open a brokerage account you sign off on documents that you're bound. to arbitration for any disputes you don't get to go to a jury that's great i'm going to go to a judge ninety eight percent of all. all. complaints against the industry are on resolved nobody ever gets their money out of the industry and the purpose is that
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a judge rake off on the citi group case the two hundred eighty five million the city has a stall judge or a cross says that yes the sea is going to have to figure this out because the federal judicial system doesn't have dominion over these criminal acts so there is no law governing the criminal acts of these various banks is there it's good to be the king listen you know when you have a congressional system that is based on e.-bay when you could buy a congressman or senator or when they get sold to the highest bidder who gives a fuck about regulation who cares about any of that you can do whatever you want him out thirty seconds not what you think about this story that congress is legally allowed to engage in insider trading with pre i.p.o. stock given to congress people and it's not legally considered to be a bribe your thoughts it's consistent with everything else we know about the
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parliament of whores that is the us congress they are up for bid you know we really need a third party to actually see if we can maximize how much we can sell them for our place your bed by a congressman get whatever regulation you want passed that's how america works in two thousand and eleven all right private all right all stock comp thanks so much for being on the kaiser report my pleasure max or to make you work with the. problem that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our thank my guests barry ritholtz of riddle's dot com you can follow us on twitter you can follow us on facebook you can follow me max keiser on twitter and follow me instead of stacy her because i'm trying to stay her ahead of her and trust me that's what you want to do you want to send me an e-mail send it to kaiser reported r t t v dot ru until next time x. guys are saying.
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